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There are many ways to buy or sell a stock for a profit.  You could currently be using fundamental analysis, broker recommendations, astrological timing, or many hundreds of other methods.  But no matter what your method for buying or selling a stock is, the truth is that none of it matters unless the stock you want to buy is going up.  

ASX Market Watch provides free research on Australian Stock Trends, a free course on how we determine those trends, and free articles on building wealth - all in the aim of providing a transparent and useful service to people like you.  

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Contact Dave here: dave@asxmarketwatch.com

January 24, 2010   Posted in: Research On Australian Stock Trends  No Comments

Trend Update: AMP, BHP, ANZ, QBE Confirm Down Trends

February 7th 2010

This week four more stocks in the Top 21 confirmed medium term down trends.  This brings the ratio of up and down stocks to 7:14, or 66% of stocks pointing down. 

And it is a mix heavily weighted towards financials, with AMP, ANZ, and QBE all falling in line with the overall market.  BHP was the only different sector involved this week, closing twice below its uptrend line to make the only down trend change for the materials sector.

Amazingly, Suncorp (SUN) remains in the strongest up trend, while others are hanging on, and only just.

Many people are calling a bullish run in 2010, but you can’t ignore the trend – especially a stronger trend like that of a weekly chart.  And right now, the majority are pointing down.

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February 7, 2010   Posted in: Market Watch  No Comments

How To Avoid A Stock Market Crash Like 1987 and 1929

By Dave McLachlan | (If you enjoy this article, you can help by linking to it from your site!)

How To Avoid A Stock Market Crash Like 1987 and 1929

If there is anything that strikes fear into the hearts of stock market investors, it is a major stock market crash.

In fact, we have heard many tales of how 1987 and 1929 wiped out the entire wealth of many investors and traders in the stock market, and how it happened quickly and without warning.  But did it really creep up on us?  Or could we have been well prepared?  In this article I am going to show you a simple method for being aware that a stock market crash is about to happen, and how to avoid it.

You see, in both cases of a major stock market crash like 1987 or 1929 there are a few facts that we need to be aware of, so we can look out for them in the future:

The first is that prices started falling weeks before the actual stock market crash occurred.  In the case of 1987, a full seven weeks of lower prices from the previous high happened.  In 1929 it was also seven weeks from the previous peak.

The second is that even though prices did fall for seven weeks prior to a stock market crash, there was a bounce in between.  What this means is that prices fell, then they rose for one to three weeks, before falling back down through the previous trough in price.  And the week after is when the stock market crash happens.

If we look at the price action I’ve just described on a price chart, it looks like a zig zag downwards.  In fact, Charles Dow coined this phenomenon as his own back in the late 1800s – a theory that is now known as Dow Theory.  Watch the video below as I demonstrate how to use this in real life and over history:

So far this is simple enough, right?  But will a stock market crash happen every time we get a zig zag down in price?  The simple answer is no.  If we had a crash every time, we would have had hundreds of crashes in the last century alone. 

But Dow Theory will give you fair warning of a bear market also – in fact the same action occurred in 2007 – long before the “experts” were calling an actual bear market or recession.  Sometimes the down move will be severe like 1987 or 1929, sometimes it will be prolonged like in 2008, and sometimes it will simply reverse again and resume an uptrend.

Overall, the probability is high though, at around 70%.

So what does this mean for you?  It’s simple.  As an investor, if you see price fall, bounce, and then fall through the previous trough (most notably on a weekly price chart), then it might be a good time to lighten some of your positions and be ready.  You can always get back in again if a crash doesn’t happen.

February 7, 2010  Tags: , , , , ,   Posted in: Articles On Building Wealth  No Comments

ASX Market Watch February 2010 – When Does A Correction Become A Bear Market?

By Dave McLachlan

Click below for the latest Market Watch Video (if you can’t see the video, click the link above).

UPDATE:

This week we check what to look for when a correction becomes a bear market, and also what to look for to avoid stock market crashes like 1987 and 1929.

In the market the ASX Top 200 and Dow Jones have continued their correction, and we are looking for a bounce upwards before any more downward action. As always this is not a recommendation, please do your own due diligence.  A great place to start is the free trading and investment course on this site.

Happy trading!  If you enjoyed this video, please link to it from your site!

February 6, 2010  Tags: , , , , , ,   Posted in: Market Watch  No Comments

WBC – Westpac Banking Corporation

These extracts from my trading diary are for educational purposes only and should not be interpreted as investment or trading advice: Terms of use

.

Code:

Company Name:

Sector:

Size:

 Confirmed Trend:
 

WBC

  

Westpac Banking Corporation

  

Banks / Financials

  

ASX Top 20

.

Commentary:

Westpac Bank has confirmed a medium term down trend, after making a Dow Theory exit at $24.20 in November 2009, and a trend line exit in February 2010.

The up trend would be resumed with a Dow Theory entry, or a close above $26.21.

Click the chart below to enlarge:

 

Previous Trend Changes:

Nil

February 4, 2010  Tags: ,   Posted in: Research On Australian Stock Trends  No Comments

FGL – Fosters Group

These extracts from my trading diary are for educational purposes only and should not be interpreted as investment or trading advice: Terms of use

.

Code: Company Name: Sector: Size: Confirmed Trend:
 

FGL

  

Foster’s Group Ltd

  

Food Beverage & Tobacco

  

ASX Top 20

 

.

Commentary:

Although Foster’s Group has got a ridiculous amount of trend line resistance and support surrounding it, I have to confirm its up trend as it has made two closes above the steeper down trend line in July 2009.

A cautious investor would wait for the trend line resistance to pass, at $5.80.

Two closes below the up trend line – currently around $5.20, would signal that the up trend was wrong.

Click the chart below to enlarge:

 

Previous Trend Changes:

Nil

February 4, 2010  Tags: , , , ,   Posted in: Research On Australian Stock Trends  No Comments